Support for small businesses in Tatarstan: “If an entrepreneur has nothing, we also consider such options”

“If a person has nothing, we also consider such options”

The round-table talk headlined state support for SMEs took place on 10 October with representatives of the Ministry of Economy of Tatarstan. Specialists of the ministry chaired by First Vice Minister of Economy Rustem Sibgatullin told the audience about topical state supporting measures for small and medium enterprises. By the way, as he said, the republic holds the lead among the Volga district’s regions in number of businesses — they total about 154,000 in Tatarstan, while the share of SMEs in gross regional product is equal to 25%.

“Microfinance is a popular measure from a perspective of simplicity and universality of application. The Entrepreneurship Support Fund provides this service,” Rustem Sibgatullin noted. The fund headed by Aydar Salikhov grants microloans from 100,000 rubles to 5 million rubles for three years at 7,5% a year with the lowest requirements for the borrower.

The product aroused head of the Tatarstan Association of Restaurateurs Galina Sharafutdinova’s special interest, she complained that “bright-eyed people who want to set up their business are often thrown overboard, as they have nothing — either collateral or credit score”. The participant of the meeting wanted to understand if there were state supporting measures for beginners whom all banks deny, at least in the Centre for Microfinance.

“If a person has nothing, we also consider such options. We accept guarantees from people who aren’t linked with this business. If everything in the business plan looks real, we will grant a loan, no problem. Generally speaking, the Ministry of Economy has some KPI — no less than 10% of microloans must be given precisely to start-ups,” representative of the Centre of Microfinance Vyacheskav Solovyov replied.

Keeping introducing participants of the meeting with key areas of state support for small and medium-sized entrepreneurship, Sibgatullin reminded of a tool of the Tatarstan Guarantee Fund, which Timur Termigaliyev chairs.

“With cold cash, the fund can give security for the entrepreneur to the bank. Seeing the state fund as a guarantee, the bank starts to look at the deal differently and often grants a loan. Talking about capitalisation, the Fund for Microfinance’s capitalisation is a billion rubles, that of the Guarantee Fund is 1,2 billion,” the first vice economy minister said.

“The state will pay off the interest”

The speaker also told the audience about an interest rate subsidisation programme of the Centre for SMEs Support and Development Programmes of Tatarstan.

“The most important thing is that we can fully subsidise an interest rate. In other words, the entrepreneur will have to just pay off the loan, while the state will the interest. This programme’s fund for the rest of the months this year is 130 million rubles. Nowadays there have been submitted over 40 applications for the programme. If we feel the interest of businesses in this programme, if we understand that banks evaluate this programme as positive, we could make it the flagship,” Rustem Sibgatullin gave a speech.

Head of the Centre for SMEs Support and Development Programmes of Tatarstan Timur Gumerov talked about terms and restrictions of the programme in detail.

“I will like to pay attention to the fact that the interest we subsidise, which is 14,12% this year, isn’t out of thin air: it is based on official data provided by the Russian Central Bank. We took the average weighted interest rate of loans in the last three years,” the speaker said. “As for the conditions, the loan must be taken out no earlier than 1 January 2017, the interest rate mustn’t exceed 14,12%, the loan must be working at the moment of submitting an application, and the loan term must be more than a year.”

Manager of Cheeseria restaurant Roman Butuzov had questions about the interest rate subsidisation: “Mr Sibgatullin, you said that the fund of the programme for the rest of the months this year was 130 million rubles. Is the sum given by the state considered the full payoff of the loan or till the end of the year anyway?”

“Till the end of the year. A new year is a new budget. An enterprise that had its loan paid off, for instance, 12 payments, can submit a new application for the next round of subsidies next year. I think it is the disadvantage of the programme. The advantage is that it already exists, and it is one of the issues we need to make a decision about,” Rustem Sibgatullin replied.

“It is a good opportunity for entrepreneurs”

During the round-table talk, there was mentioned a programme of preferential lending 8,5%, which is implemented within the national project Small and Medium-Sized Entrepreneurship and Support for Individual Entrepreneurial Initiative. It became available to a big number of enterprises in early October: restaurant and rental businesses as well as retail trade microbusinesses were added to the list.

In addition, the biggest loan for investment purposes was doubled — from a billion to 2 billion rubles. The lowest sum didn’t change — 500,000 rubles. The loan term is up to 10 years. It should be noted that the loans of the programme are granted not only for investment purposes but also for working capital financing — from 500,000 to 500 million rubles, the term is up to 3 years. The rate isn’t over 8,5%.

“In this case, a bank does all the job when it comes to the collection of documents instead of the borrower. There is certainly no trickery of the bank in small print, a business cooperates with the state within the programme anyway,” Manager of the Directorate for Small Enterprise Development at Ak Bars Bank PJSC Ilnur Mutykov said. “We really actively work in this programme, we like it. Nowadays it is a good opportunity for entrepreneurs.”